Asia’s growing appetite for private markets is pushing fund managers to balance expanding access with preserving the illiquidity premium.
“It would be a fallacy to pursue liquidity for the sake of giving up returns. There is an illiquidity premium that you like to harvest,” Mark Hindriks, Managing Director, Investments, at Azalea Investment Management, spoke at DealStreetAsia’s Asia Private Equity Leadership Summit in Hong Kong.
Rather than forcing liquidity onto inherently illiquid assets, the focus should be on portfolio construction and product structuring, he said during a panel session titled ‘How wealth is reshaping private markets in Asia’.
Markets today are getting more mature with a variety of sub-asset classes such as secondaries and private credit, creating good options for liquidity in asset managers’ programmes.
The debate comes as private wealth increasingly becomes a key fundraising engine for alternative managers globally. The industry is facing mounting scrutiny over valuation methodologies, redemption mechanisms and alignment between institutional and retail investors.
According to Sharon Chow, Director and Head of North Asia, Global Wealth Solutions, at KKR, governance and deployment discipline become especially critical in evergreen structures. “The inflows you’re getting versus how much you deploy becomes a direct correlation in terms of how much the performance is translating from the drawdown vehicles or the underlying of the portfolios to the evergreen funds,” she said.
Chow added that guardrails remain necessary as private market access expands into wealth channels. “At the end of the day, we want to make sure private wealth investors and institutional investors are accessing the same quality of deals.”
Benchmarking performance
Assessing performance in evergreen and semi-liquid vehicles remains challenging, partly because many structures are still relatively young, panellists said.
“You go back to fundamentals. You have to do the extra work and look at what the managers are investing in, how liquidity management is governed, how transparent and what their track record is. Only then do you start to get an appreciation for how these products differ,” asserted Hindriks.
Meanwhile, Brad McCarthy, Managing Director and Head of Asia-Pacific of Carlyle Global Wealth, added that wealth gatekeepers are increasingly conducting deeper due diligence on how evergreen products are structured. “They are asking you what amount of leverage might be embedded within an evergreen product, because that can lead to a different return number,” he said.
Samantha Lin, Principal, Asia Private Wealth, TPG, echoed her co-panellists on the track record component, citing double-digit internal rates of return generated by the firm over recent years.
However, she noted that IRR alone may not fully capture the economics of open-ended vehicles, where capital is 100% called and continuously invested.
On valuation metrics, she commented: “We use the market approach and income approach to make sure our marks are as close as what’s happening in the public market.”
The elephant in the room
While redemption pressure is inevitable, Asia might have some buffer from what’s going on in the global market, the panellists observed. Johann Santer, Senior Managing Director and Head of Private Wealth APAC at Blue Owl, noted that Asia has benefited from private credit, thanks to the strategy’s income profile.
“Private credit has generated a premium in excess of 300 basis points compared to public markets, for giving up part of your liquidity in the portfolio,” he said. “Direct lending remains attractive, as it has a lot of liquidity, which allows you to deploy capital at more attractive rates.”
Blue Owl raised $42 billion globally in 2025, including $17 billion from wealth clients. In Q1 2026, the firm raised $11 billion, of which nearly $3 billion came from private wealth investors. Santer added that the nonaccrual rate across its traded and non-traded BDCs also came down in Q1.
Market jitters are “very much headline-related rather than reflecting any fundamental differences in the portfolio itself,” Santer noted.
The panellists also pushed back against assumptions that Asia’s wealth segment lacks sophistication. Even though there was no big-bang change, McCarthy sees an encouraging evolution in investment behaviours across Asia, which makes its investor base well-suited for private markets.
Here to stay
“With entrepreneurship passing down through generations, investors in Asia are already used to the concept of long-term value creation, and what it takes to be patient capital. We’re now actually at the stage of understanding how we build a resilient programme,” Hindriks said.
Still, education remains critical, particularly given the region’s relatively fluid capital environment.
One thing that shapes Asian investor behaviour is that many markets here do not impose capital gains tax in the same way as the US, added Chow. But at the same time, that means Asian investors can move in and out of opportunities relatively easily. “Education becomes a very important piece to make them understand what these long-term investments really mean,” she said.
Private market penetration across the region is generally less than 10%, with Japan at even 1%. That makes Japan one of the biggest untapped opportunities in Asia, according to the panellists.
“You have certain tailwinds, whether it’s government initiatives, demographic changes with an elderly generation who care about stability and income. That’s a strong fit for our products,” said Santer.
McCarthy added that Asia’s structural growth profile continues to make the region difficult for global firms to ignore.
“Asia represents the world’s second-largest pool of wealth, but its growth rate is the highest. From a business perspective, leaning into that growth is entirely rational,” he said.
